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Material wealth and human happiness and human happiness

Author:Max

Release on :2016-07-25

Economic growth is the
religion of the modern world, the elixir that eases the pain of conflicts, the
promise of indefinite progress. It is the solution to our perennial worries
about not getting what we don’t have. And yet, at least in the West, the growth
model is now as fleeting as Proust’s Albertine Simonet: Coming and going, with
busts following booms and booms following busts, while an ideal world of
steady, inclusive, long-lasting growth fades away.

John Maynard Keynes, writing at the outset of the economic
crisis of the 1930s, warned against misdiagnosing the situation. In his famous
article “Economic Possibilities for Our Grandchildren,” he declared that a
period of exceptional prosperity was at hand and that the world’s “economic
problem” would soon be resolved — just as, in the preceding century, strong
growth and food safety arrived on a wave of technical innovation. To wring all
we can out of the economic growth model, he said, the world must set aside
greed and fear, outdated characteristics of a bygone era of misery. Instead, we
must learn to enjoy ourselves — and above all to consume, without restraint and
without worrying about tomorrow. Ultimately, Keynes believed that we would end
up working only three hours a day and after turn to the truly important tasks
of art, culture and religion.

The so-called Easterlin paradox helps explain Keynes’s mistake.
According to the economist Richard Easterlin, wealth does not correlate to
happiness. A higher salary is obviously always desirable, yet once we’ve
reached that target it is never enough: We fall victim to a process of
habituation of which we are largely unaware. Similarly, as we each set goals
for ourselves driven by our current desires, we fail to take into account how
our desires change over time and in new circumstances. This explains why
economic growth, more than pure wealth, is the key to the functioning of our
society: It provides each of us with the hope that we can rise above our
present condition, even though this dream remains ever elusive.

Which brings us to the fundamental question: Will economic
growth return, and if it doesn’t, what then? Experts are sharply divided. The
pessimists, led by the economist Robert Gordon, believe that the potential for
economic growth is now much lower than in the last century. The new industrial
revolution may have given us the smartphone, but that hardly compares, in his
thinking, to the great advances of the 20th century: electricity, the
automobile, the airplane, movies, television, antibiotics. On the other hand,
optimists like Erik Brynjolfsson and Andrew McAfee tell us in their book “The
Second Machine Age” that Moore’s Law is going to allow “the digitization of
just about everything.” Already, Google is experimenting with driverless cars,
and robots are caring for the elderly in Japan: Another burst of growth appears
to be at hand.

To decide who is right, one must first recognize that the two
camps aren’t focusing on the same things: For the pessimists, it’s the consumer
who counts; for the optimists, it’s the machines. Yes, computers have in some
cases replaced humans, but the essential question then becomes: What happens to
the workers who are replaced by machines? This is not a clash between those who
believe in technology and those who don’t. New technologies are destined to
produce marvels. What matters is whether they will substitute for human labor
or whether they will complement it, allowing us to be even more productive.

It’s useful to compare this situation with the 20th century when
American farmers, comprising 38 percent of the labor force in 1900, moved to
the cities and became highly productive workers in new industries. Economic
growth quickly doubled. The fact that the purchasing power of the American
middle class has grown so little over the last 30 years reflects another major
change: Workers have left the factories — but their productivity in their new
jobs (if they find them) is stagnant, meaning that economic growth is petering
out. The logical conclusion, then, is that both sides in this debate are right:
We’re living an industrial revolution without economic growth. Powerful
software is doing the work of humans, but the humans thus replaced are unable to
find productive jobs.

So how do we deal with a world without economic growth — if that
were to come to pass? How do we motivate people if we can’t fulfill their hopes
for rising living standards? One recalls the radical move by Henry Ford to
double salaries in his factories to cut back on absenteeism and to reinvigorate
his employees’ desire to work. In growing economies you can reward diligent
workers with rising wages. Today’s companies do give bonuses to workers based
on merit, but that carrot comes with a stick: layoffs if goals aren’t met.

Work hard or get laid off, as opposed to work hard and get
higher wages: This management-by-stress technique is a major cause of suffering
in our modern societies. The economists David Blanchflower and Andrew Oswald
have shown that mental stress in the workplace has only grown worse over the
years. Unfortunately, unhappy workers are less productive; on the other hand,
content workers are more cooperative and creative. The point is this: If
workers are to be productive again, then we must come up with new motivation
schemes. No longer able to promise their employees higher earnings over time,
companies will now have to adjust, compensate, and make work more inspiring.

The Danish economic model, much discussed in Europe, shows that
it is indeed possible to motivate workers by something other than fear. Denmark
ranks highest in “job quality in Europe,” namely because the level of autonomy
granted to workers is so extensive. The country’s ample safety net protecting
laid-off workers and providing job retraining encourages mobility in the
workplace and eases fears about losing one’s job. It’s no wonder then that in
2013 Denmark was declared the happiest country in the world.

It would be absurd to argue that the ills of Western societies
all arise from the stagnation of individuals’ purchasing power. But to ignore
the problem and go on pretending that growth will surely return, just as it did
after World War II, will only blind us to the reasons weak economic growth
produces a morose society. We must now imagine a world in which happiness and
satisfaction with one’s life and work replaces the futile quest to always earn
more.